Arrrrrrrr your piracy days over? Federal Court of Canada weighs in

Last Thursday, a huge decision came down from the Federal Court of Canada in the case of Voltage Pictures v. John Doe and Jane Doe. No, seriously, this is big. 80 Google News results! When was the last time a Federal Court decision even made the news? Does the decision mean the end of Canadian illegal downloading as we know it? Maybe! Maybe not! Well that’s clear as mud. Let’s try and sort this all out.

So what have we got here? At its core, we’ve got a decision (warning: massive 60 page PDF) from Prothonotary Kevin Aalto that orders… oh, shit. I did not mean to use the term “prothonotary” because now you want to know what the hell. Here’s Wikipedia. In essence, at the Federal Court of Canada at least, a prothonotary is a judge. They make a lot of interlocutory decisions (oh shit again I used a term needing explanation – basically that means “during the case”) and do some trials with really cheap amounts. Here’s Mr. Aalto; he seems nice.

OK where were we. So the decision basically says that TekSavvy, everyone’s favourite ISP because of this, must turn over the names and addresses of about 2000 people that Voltage believes have illegally downloaded movies via BitTorrent that they own the copyright for. I would give you the background on the case, but I wrote about it when it launched, so go read that. It’s ok I’ll wait. Though I think I will have to repeat that this case is not about the Hurt Locker like so many other Voltage Pictures cases. Some of the cinematic classics that Voltage claims were illegally downloaded are True Justice: Blood Alley, Another Happy Day aka Reasonable Bunch, and of course our favourite, Balls to the Wall.

So what was this particular interlocutory decision about? Well back in June of last year, there was a hearing. As is common when suing a bunch of Does on the internet, the first thing you do is go into court and try to get names and addresses for those Does. You track IP addresses, and then get the court to order the ISP to turn those IP addresses into people’s names and addresses. So that’s the simple issue of what this decisions is about. But at 60 pages, there is a lot more juiciness. As usual, I’ve read it all so you don’t have to. And our Prothonotary gives a nice introduction to the issues at hand he’ll be discussing:

Do persons who download copyrighted material from the internet using a peer to peer (P2P) network and the BitTorrent protocol through the auspices of an ISP have a right to privacy such that their contact information not be revealed to the party whose copyright is being infringed? If they are infringing copyright, what remedy, if any should the Court impose? … While at first blush the answer may seem simple enough, in reality given the issues at play the answers require a delicate balancing of privacy rights versus the rights of copyright holders

I bolded that last part because hell it’s important. It means the Prothonotary has a sense of the importance of this order. The privacy implications are why the Canadian Internet Policy & Public Interest Clinic (CIPPIC) intervened in the case. An order that just said “here you go copyright holders, you can have these names and addresses any time!” would have been a disaster. But I must say, this order seems pretty fair and reasonable! Let’s dive in.

So after introducing the issues and giving a little background on the case, Mr. Aalto explains one reason why CIPPIC thinks this case is important:

CIPPIC characterizes Voltage and Canipre the forensic company retained by Voltage to track the names of the Subscribers as “Copyright trolls” engaged in “speculative invoicing” which seeks to intimidate individuals into easy settlements by way of demand letters and threats of litigation

Now we’re getting somewhere. If this decision prevents copyright trolling, we’ll really have something! Let’s see what the Court says:

it must be noted on this motion, that whether Voltage is or is not a “copyright troll” in pursuing information from TekSavvy is not for determination

Crap! Ah well. Mr. Aalto then rehashes the facts, explains BitTorrent, and how Canipre uses software to track IP addresses of BitTorrent seeds and leechers. 2000 IP addresses, all in Ontario, are traced to TekSavvy. The Court noted that Voltage was involved in 22 different file-sharing lawsuits in U.S. Federal Courts. Voltage wants the names and addresses of the alleged infringers from TekSavvy, while CIPPIC said privacy concerns (as enshrined in the Canadian Charter of Rights and Freedoms) mean that TekSavvy should not have to turn over the info. John Doe and Jane Doe, being not really people but fictitious made-up defendants, did not attend the hearing or take a position.

The Court then introduced the law, explaining that they were asked to deliver a Norwich Order, which essentially is a Court order telling a third party (i.e. not a party to the litigation) to produce some documents or information. The Court concludes:

given that Voltage has demonstrated a bona fide case of copyright infringement, a Norwich Order will be granted. This Order will be granted with qualifications intended to protect the privacy rights of individuals, and ensure that the judicial process is not being used to support a business model intended to coerce innocent individuals to make payments to avoid being sued.

Nice, he does want to stop copyright trolling. And we’re done! Oh wait, there are still 40 pages of “analysis”. Let’s analyze the analysis. The first part centers on the BMG case. That dates back to 2004-2005, when a Federal Court judge actually refused to order the anonymous music downloaders be named. Our Prothonotary spends 5 pages just quoting BMG. Lazy! He does a nice job though summarizing BMG’s five principles as to when the Order should be granted:

The Plaintiff must have a bona fide case;

the non-party (TekSavvy) must have information;

a Court Order is the only way to get the information;

fairness requires the info be provided prior to trial; and

the order will not cause undue delay, inconvenience or expense to the third party or others.

Voltage says the criteria have been met. CIPPIC says other jurisprudence since BMG have modified the criteria, but Mr. Aalto laughed in their face. There’s a whole bit about “prima facie” vs. “bona fide” standards, but it’s all boring legal mumbo jumbo I won’t bore you with. In the end, the Court says Voltage meets the 5 criteria. So next:

Having determined that Voltage is entitled to a form of Norwich Order, the question becomes what limitations the Court should impose to protect or minimize the privacy risks as it relates to the Subscribers

The Court finds these limitations by analyzing a bunch of cases from the U.K. and the U.S.A. which have discussed the issue, and which have provided a “framework for the types of safeguards the Court can employ to protect the interest of internet users.” I won’t dive into all the details, even though one case is quite fascinating as it involves online scalping of Rugby tickets, and another case is about porn (I dare you to read the party names in that one). Well, actually a lot of the cases are about porn. ANYWAY, our Prothonotary does a nice job summarizing the UK and USA cases. He says those Courts are always worried about copyright trolls, they are open to imposing safeguards, and that users identified by IP addresses may not be the actual infringer. The Court also concludes that the UK and USA courts say privacy concerns are secondary, as privacy should not be a shield for illegal activity.

Mr. Aalto then has more conclusions from all the jurisprudence, including the fact that the party who wants the Order should pay the costs of the third party, the info should be limited to names and addresses, the Court must monitor implementation of the Order, the information must remain confidential, and a bunch of guidelines for any demand letter sent to the alleged infringer. He then finally gets to the actual Order, which comes in 13 parts. I guess for completeness’ sake I’ll have to list them. They’re also kind of important. I’ll try to be brief:

There will be a case management judge who will oversee everything;

TekSavvy shall give names and addresses of the alleged infringers associated with the IP addresses to Voltage;

TekSavvy’s costs and disbursements shall be paid by Voltage;

TekSavvy shall be paid these costs before releasing the info;

Voltage must include a copy of the Court Order with any letter to an alleged infringer;

Any alleged infringer who wants the full reasons for the Order shall get them, at Voltage’s expense;

Any lawsuits started by Voltage after they get the info shall be part of this Court file;

Any letter sent by Voltage to an alleged infringer must say, in bold type, that the Court has not yet said they have actually infringed or that they are liable for damages;

The Court shall review and approve any letter before it is sent;

The info given by TekSavvy must remain confidential and only used for the case;

Voltage shall not release the names and addresses to the public or media;

Anyone related to the case, including the defendants once named, can have a case conference with the case management judge; and

The case management judge can vary the Order.

Whew. Sorry about that. And now we’re done.

Super happy fun time analysis

A lot has already been written about this case in the five days since it was released, and I agree with a lot of it. The general consensus is that “both sides won”, and I fall into that camp. Yes, the Court ordered TekSavvy to turn over the names and addresses, but with such restrictions that there is a victory for internet users too, and against the copyright trolls.

Michael Geist has a great piece today about the economics of the situation. Remember, the updated Copyright Act says that the maximum award that can be given for individuals illegally downloading for personal use is $5000, and can be as low as $100. I agree with Geist when he says “I would argue that the actual number is likely to be at the low-end of the scale for a first-time case”. Geist runs the numbers, and with the cost of litigation, it just does not make a lot of economic sense to sue, or even to get some settlements with the very tough conditions.

The whole point (probably) of Voltage wanting to get the names and addresses was not to sue, but to send letters threatening to sue, in order to have people nervous about being sued so they will settle. There is no real proof of this, but given the number of times Voltage goes to court and the number of Defendants, it does seem to be their plan. Really, how much damages can they expect from a lost sale of Balls to the Wall? The answer is $100, maybe. After two years of litigation? That’s no payoff. After sending a threatening letter you get, say, $500 or $1000? That makes sense.

Here’s what’s good about that 13-part order – it really helps a potential defendant know what’s up. By forcing the letter to be approved by the Court, by saying in the letter that the intended Defendant has not yet been judged to have infringed, you are protecting the letter recipients who will be less scared, and thus less likely to quickly settle. And you can bet that if said letter says “give us $10,000 and we’ll go away”, the Court will reject it before it’s even sent, because that’s just bull.

And let’s talk about pornography. The threatening letter always works for porn downloads because people don’t want it out they downloaded porn. By setting the precedent that the names and addresses must remain confidential, you have eliminated the “shame” factor that a copyright owner could play on to force a settlement.

The 13-part order has other deterrents to copyright trolls as well. If they have to pay the costs of the third-party, that makes the economics of the situation even worse for Voltage (Geist makes this point in his calculations). Voltage also has to pay for a shitload of paper to send the Order and requested reasons to a Defendant. By having a case management judge to supervise everything, Voltage cannot do anything fishy.

So arrrrrrr your piracy days over? If you are just downloading a movie for personal use here and there, probably not.

excellent clarity Blackbeard Mendelsohn, I have read extensively on this even going behind the paywall, and your explanation is by far the most comprehensive and useful.

What a contrast in jurispudence between our cousins in both the UK and US. Thank you Mr Trudeau. I wonder if over time Harper could skew the courts to think US? In any event true checks and balances keep Canadians troll free for some time to come.

For me it does not matter because they will pry my copy of Balls to the Walls out of my cold dead hands.

I was really hoping that he would sever the lawsuits. After my cursory review, I could not find reasons as to why he chose not to sever though he does mention that some courts have and have not made such an order.

About Me

Allen Mendelsohn is me. I am a lawyer specializing in internet law working out of Montreal, though sometimes I do it in front of the U.S. Capitol. That should tell you what you need to know about internet law in Canada. I also warp young legal minds at the Faculty of Law at McGill.